Tutorial 7 Flashcards
Chapter 11
direct exports
The sale of products made by firms in their home country to customers in other countries.
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fob(free on board)
Contract clause: the seller has to deliver goods free on board of a ship or train.
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cif(cost of insurance and freight)
Contract clause: the seller has to pay all transportation costs to a destination port.
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bill of lading(B/L)
Document certifying the delivery of the goods to a ship or train.
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letter of credit
A financial contract that states that the importer’s bank will pay a specific sum of money to the exporter upon delivery of the merchandise.
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indirect exports
A way for SMEs to reach overseas customers by exporting through domestic- based export intermediaries.
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export intermediaries
A firm that performs an important intermediary function by linking sellers and buyers overseas.
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distributors
Intermediaries trading on their own account.
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cross border services
Supplying services across national borders.
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servicing foreign residents
Supplying services to customers coming from abroad.
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licensing
A contract by which a firm allows another firm to use its intellectual property rights in return for a fee
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franchising
A contract by which a firm allows another firm to
use its branded service or products in return for a fee.
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turnkey projects
Projects in which clients pay contractors to design and construct new facilities and train personnel.
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design and built contract
A contract combining the architectural or design work with the actual construction.
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built operate transfer
A contract combining the construction and temporary operation of a project eventually to be transferred to a new owner.
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tender
A competition for a major contract.
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consortium
A project-based temporary business owned and managed jointly by several firms.
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subcontracting
A contract that involves outsourcing of an intermediate stage of a value chain.
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management contract
A contract over the management of assets or a firm owned by someone else.
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experiential knowledge
Knowledge learned by engaging in the activity and context.
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Uppsala model
A model of internationalization processes focusing on learning processes.
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network internationalization model
A model of internationalization that focuses on the international growth of business networks.
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stages model
Models depicting internationalization as
a slow stage-by stage process an SME must go through.
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international new venture
Start-up company that, from inception, seeks
to derive significant competitive advantages from the use of resources and the sale of outputs in multiple countries.
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mimetic behaviour
Imitating the behaviour of others as a means to reduce uncertainty.
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market seeking FDI
Investors’ quest to go after countries that offer strong demand for their products and services.
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natural resource seeking FDI
Investors’ quest to pursue natural resources in certain locations.
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efficiency enhancing FDI
Investors’ quest to single out the most efficient locations for each value chain activity.
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capability enhacing FDI
Investors’ quest for new ideas and technologies to upgrade their own technological and managerial capabilities.
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location specififc advantage
Advantages that can be exploited by those present at a location.
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first mover advantage
Advantages that first movers obtain and that later movers do not enjoy.
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late mover advantage
Advantages that late movers obtain and that first movers do not enjoy.
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modes of entry
The format of foreign market entry.
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non equity modes
A mode of entry that does not involve owning equity in a local firm.
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equity modes
A mode of entry (JV that involves taking full or partial) equity ownership in a local firm.
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wholly owned subsidiary
A subsidiary located in
a foreign country that is entirely owned by the parent multinational.
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greenfield investemnts
Building factories and offices from scratch.
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acquisition
The transfer of the control of operations and management from one firm (target) to another (acquirer), the former becoming a unit of the latter.
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partial acquistion
Acquisitions of an equity stake in another firm.
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strategic alliance
Collaboration between independent firms using equity modes, non-equity contractual agreements, or both.
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scale of entry
The amount of resources committed to foreign market entry.
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platform investement
An investment that provides a small foothold in a market or location
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brownfield acquisition
Acquisition where subsequent investment overlays the acquired organization.
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multiple acquisition
A strategy based on acquiring and integrating multiple businesses.
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staged acquisition
Acquisitions where ownership transfer takes place over stages.
